Although one industrial asset is vacant and at least two office assets have above-average vacancy rates, the overall capitalization rate for the portfolio is likely to be impressive. "It appears the number will start with a six," August said in Wednesday's earnings conference call.

The prize property is the 540,000-sf 123 N. Wacker Dr., which the REIT bought in 1999 for $87.25 million, saw major tenant Aon Corp. leave for the East Loop, then repositioned to a holding that is 97% occupied. Prentiss Properties Trust owns 616,000 sf in two buildings in the O'Hare submarket in One O'Hare Centre at 6250 N. River Rd. and O'Hare Plaza II at 8755 W. Higgins Rd. Four properties in the East-West Corridor total 512,000 sf and three assets in Lake County total 458,000 sf.

Prentiss Properties Trust will spend the next two weeks analyzing the bids, which will likely include conversations with the bidders on details of their proposals, August said. "It's a little bit complicated, with the different permutations and combinations," he added.

Besides buyers targeting selected assets, bidders also have raised issues including paying off existing mortgages, income support during additional lease-ups as well as asset swaps. Six office assets are 100% leased, four to single tenants, but occupancy is just 70% at One O'Hare Centre and 66% at O'Hare Plaza II. Meanwhile, three local assets are included in the collateral on a $180.1-million loan at 7.58%. Also, another six years remain on a 6.8% mortgage on One O'Hare Centre, with a balance of $38.8 million, while there is another seven years to go on an 8.05% mortgage on Bannockburn Centre, where the balance is $25.7 million. There is less than four years and $24.2 million left on the mortgage on the 322,000-sf Corporetum Office Campus in Lisle, which carries a 7.02% interest rate.

The Dallas-based REIT hired Holliday Fenoglio Fowler LP in April to shop the city and suburban office portfolio, industrial assets, as well as a 242,000-sf office property in Detroit. Prentiss Properties Trust will reinvest the proceeds, either in newly acquired buildings or development projects, rather than declare a special dividend, August says.

Instant Insights /

123 N. Wacker, Prentiss Assets Draw Multiple Bids

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